How is relief of debt treated for tax purposes? Does it matter if the debt is recourse or non-recourse? Does it matter if the debtor is a separate entity guaranteed by the owner(s)? Does it matter if the debt is forgiven as part of a sale of property securing the debt? These issues were addressed…
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The Tax Court recently issued an order declining to grant either the IRS’s or taxpayers’ motions for partial summary judgement.[1] The taxpayers in question are the shareholders of a subchapter S corporation that in prior, now closed years, deducted losses from the corporation in excess of their adjusted bases in the corporation’s stock. The IRS…
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On February 2, 2022, the Tax Court issued a memorandum opinion in the case of John M. Larson (“Larson”).[1] This case involves a dispute going back more than 20 years. Mr. Larson was an attorney and CPA. He and two other men, Robert A. Plaff and David Amir Makov, promoted a fraudulent tax shelter transaction…
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We regularly see continuing education materials, blog posts, publications, and other materials titled “LLC v. S Corp. – Which is Right for Your Business?” or something similar. Regardless of the exact title, these items purport to ask the question of whether an LLC or S Corp. is the better choice of entity. But is that…
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